1. 1 Uzbekistan’s financial overview Deputy minister of finance Republic of Uzbekistan S. Bekenov

2. 2 GDP growth over period of 2001-2006 (in %)

3. 3 National measure growth for 2006 National measure Growth in (%) GDP including:7,3 - Industrial production10,8 - Agriculture6,2 - Services19,5 Investment11,4 Export31,5 Real wage36,0 Inflation rateDeflate till 6,8 % State budget balance+ 0,5% to GDP

4. 4 Tax burden change dynamics over period of 1991-2006

5. 5 Taxation revision for small business and micro firms Till the July 1, 2005 Single tax– 12 % Assessments to off- budget pension fund – 0,7% Assessments to republican road fund– 1,5% Assessments to school fund– 1% Sum of taxes and assessments– 15,2% Since the July 1, 2005 Single tax payment - 13% Single tax payment rate brought down from 13% in 2005 to 10% in 2007

6. 6 Created conditions for small business Small business One year single tax deferral for newly established small business entities Verifications reduction (not more than once in 4 years). Small business entities got an option for simplisticall taxation: - Single tax payment; - single land-tax – for farm producers. Simplified book-keeping. The periodicity of tax and duties calculations submission is reduced (once in a quarter). The periodicity of financial report submission is also reduced (once in a year).

7. 7 Share of small business in GDP

8. 8 Changes in tax rates over period of 2005-2007 Kind of taxes200520062007 Income tax for legal entities 15%12%10% Single tax payment13% 10% Single social transfers31%25%24% Single tax for natural persons (maximum value) 30%29%25%

9. 9 Created benefits for non-manufacturing business According to the Decree of the President of the Republic of Uzbekistan dated April 17, 2006 «About the measures on acceleration of non-manufacturing business and services development in the Republic of Uzbekistan» with the purposes of creation of favorable conditions for the acceleration of non-manufacturing business and services development, and increase its share in the economy of the country, legal entities, rendering following services are exempted from income-tax and single-tax payments till December 31, 2010: - Microcriditig and leasing services; - Insurance services; - Professional participants services in the insurance market; - Accounting and audit services; - Household services.

10. 10 Tax privileges given in the security market The following types of income of legal entities and natural persons are not subjected to taxation: - the income received as the dividends, and transferred to increase the equity of legal entity, from which they were received; - the interest revenue from government-paper Revenue of legal entities and natural persons received as the share dividends from commercial banks are exempted from taxes for the period till January 1, 2010. The following activities are exempted from the value added tax: - operations on securities movement; - depository services and services in organization of securities auction Investment and privatization investment funds’ revenue received as the share dividends from the investment to owned enterprises, and income directed to purchase the shares in owned enterprise are exempted from tax payments, and payments to off- budget funds

11. 11 Audit service development 1. With the purposes of creation of favorable conditions to accelerate the development of audit services, and increase its share in the economy of the country, the income received from audit services is exempted from income-tax and single-tax payments till April 1, 2009 ( Decree of the President of the Republic of Uzbekistan dated 17.04.2006 #PP-325) 2. With the purposes of creation of favorable conditions to increase the credibility of security market participants towards the financial information, provided by the paper Issuers, and creation the basis for corporate management development: In case of issue the corporate bonds, the open joint-stock companies, have to provide the financial information confirmed by the auditor’s conclusion; Since January 1, 2007, the enterprises with balance cost of assets more than 1 billion UZS have to create the internal audit services, appointive and accountable to the supervisory board; At the enterprises, where the governmental equity share is more than 50 %, the audit company selection for performance of external audit is carried out on a competitive basis from the list determined by the State property committee and the Ministry of finance of the Republic of Uzbekistan. (Decree of the President of the Republic of Uzbekistan dated 27.09.2006г. #PP-475)

12. 12 1. With the purposes of creation of favorable conditions for acceleration the development of insurance services market, since April 1, 2006 revenue from rendering insurance services is exempted from income tax and single tax payments for three years period (Decree of the President of the Republic of Uzbekistan #PP-325 dated April 17, 2006) 2. According to the Decree of the President of the Republic of Uzbekistan #PP-640, dated May 21, 2007, the given privileges are applied to all professional participants in the insurance market. 3. Approved by the Decree of the President of the Republic of Uzbekistan #PP-618 dated April 10, 2007, the Program on development the insurance services market for 2007-2010 is anticipating following activities: further development of legislative and normative bases of insurance, insurance activity and insurance supervision in accordance with international practice; expansion in volumes and variety, and improvement in quality of rendering insurance services, especially in the areas of enterprise activity insurance, import-export operations insurance, life long-term insurance; integration of the Republican insurance market in the international insurance markets; insurance manpower training, retraining and rising the level of employee’s skill system development Basic directions of reforming and development of the insurance services market

13. 13 THANK YOU!